Thu 05 May 2016 | By:

Everything You Need to Know About New York Business Taxes

Small Business Taxes

New York being one of the world’s center of economy has its many advantages and drawbacks. A good number of benefits awaits small business owners, but the business taxes in the state are also one of the most costly not to mention that it is also quite complicated.

As New York business taxes are a part of your responsibility when starting a business in New York, this is one challenge that you must go through. Whether it’s at the federal or state level, there are several methods at which every single New York business tax is computed. There are also several different taxation treatments for the different business structures (LLC, Corporation, DBA, ect).

As complicated as this may sound, doing a thorough research of what you need to complete for the business tax requirements and accomplishing it on time can help you get around these challenges. The list of business taxes below should give you a rough idea on what taxes await your business.


New York Corporation Franchise Tax

A New York Corporation Franchise Tax applies to Corporations both traditional and S status. There are several ways to compute for the Corporation Franchise Tax with each computation based on a different metric.

The highest amount computed of the four metrics is the due amount for taxable income. For LLCs and partnerships, a state filing fee is imposed instead of the Corporation Franchise Tax. Meanwhile, sole proprietorships do not have a Corporation Franchise Tax nor a state filing fee, but rather, taxable income is carried out through the personal income tax return.

New York Federal Tax Forms and Publications

For New York federal tax forms and publications, all information should be obtained at the New York Department of Taxation and Finance. This is to ensure that all information obtained including the forms to be used in completing tax requirements are in conformance with state policies and regulations.

Unemployment Insurance Tax

For the Unemployment Insurance tax, every New York business is required to register for it provided that the conditions for the said insurance is met. There are several liability conditions stipulated for each kind of business structure, and you can find out if you’re qualified for it at this section of the Department of Labor website.

Note that if you are registering for this insurance tax, you must first obtain a Federal Employer Identification Number. You can register for a free EIN online at the IRS website.

New York Sales and Use Tax

Both New York Sales and Use Tax are in effect in the state. Both the state and city charge a Sales Tax, and the Use Tax complements the former tax type.

The state rate for Sales and Use Tax is at 4%, and local rates could also differ depending on the county or city. For more information regarding these tax types, you can check with the Department of Taxation and Finance.


a Great tool to try

Startup Tools and ResourcesBecause business taxes in New York are quite complicated, using tools that could help make the task easier are vital. Just as this guide is a resource to introduce entrepreneurs to the basic business taxes, using a small business accounting software can simplify accounting and bookkeeping tasks for you.

Small Business Accounting Software

FreshBooksQuickBooks, and Xero are small business accounting software that have consistently ranked as the top choice for accountants and small business owners. Each software has a set of powerful tools that help simplify accounting tasks, in the process making your business tax life easier as well.

Aside from this, there are also additional features that make these small business accounting software the top picks for most business owners. Most are cloud-based software that enables owners to perform accounting tasks even if they’re on the go.

Also, some small business accounting software also allow for third party business solutions that make it even more efficient. Plus, most of these software are also known to be very user-friendly even for non-technical individuals. The bottom line when choosing the right software for your business is to take your needs as the primary consideration, what suits your business as to the size, features, and the price.

Note that this article is an informational guide only on New York business taxes, and it should not be taken as a legal advice or a legal document. Any questions on the specifics of New York business taxes or the legalities involved in starting a new business in New York should be referred to the expertise of a business lawyer.

About Ryan James

Half hardworking hermit, half avid adventurer, Ryan founded Startup Savant to simplify entrepreneurship and pay it forward by donating a portion of all revenue to support children's education via